South African investment firm Mvelaphanda has reached agreement with fund management group Allan Gray to buy up to 30% of Johnnic Communications’ (Johncom) media unit, it said on Tuesday.
Mvelaphanda said it will buy a minumum of 25,1% and a maximum of 30% of Johncom’s media business, provisionally named Opco, for R1,413-billion in cash.
It will pay an additional amount if the firm’s net cash holdings exceed R50-million, or less if the cash holding falls below R50-million when the media unit becomes a separately-listed entity.
In April Johncom announced its intention to unbundle all of its directly-held operating media and entertainment assets to Opco to be listed on the JSE following the disposal of Johncom’s interests in M-Net and SuperSport, currently before the Competition Authorities.
Empowerment partners of Mvela Group will participate in the transaction.
Yolanda Cuba, Mvela Group CEO, said: ”Our strategy is to grow shareholder value through the combination of cash generative operations and quality investments in operating companies where Mvela Group can have strategic influence with management over the investment to grow the value of the investment for the benefit of all stakeholders.
”The Opco acquisition will give Mvela Group strategic influence with Johncom management over a unique range of leading media and entertainment assets that cannot be easily replicated.
”We have engaged with Johncom management, they welcome our investment in Opco and regard us as a strategic partner to further grow and develop Opco.
”It is important to note, we fully support Johncom’s responsibility to ensure that freedom of speech and a free and independent media remain a significant pillar in the development of our country and our continent.
”While Mvela Group’s shareholding will assist Opco with respect to its empowerment ownership, this is not an empowerment transaction per se. It is expected that Opco will implement an appropriate BEE transaction once independently listed. ” – Reuters, I-Net Bridge